[Federal Register Volume 63, Number 126 (Wednesday, July 1, 1998)]
[Proposed Rules]
[Pages 35893-35895]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-17389]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 48

[REG-119227-97]
RIN 1545-AV71


Kerosene Tax; Aviation Fuel Tax; Tax on Heavy Trucks and Trailers

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Proposed rule, notice of proposed rulemaking by cross-reference 
to temporary regulations and notice of public hearing.

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SUMMARY: In the Rules and Regulations section of this issue of the 
Federal Register, the IRS is issuing temporary regulations relating to 
the kerosene and aviation fuel excise taxes and the tax on the first 
retail sale of certain tractors, truck, trailer, and semitrailer 
chassis and bodies. The text of those temporary regulations also serves 
as the text of these proposed regulations.

DATES: Written comments must be received by September 29, 1998. 
Requests to speak and outlines of oral comments to be discussed at the 
public hearing scheduled for Wednesday, November 4, 1998, must be 
received by September 29, 1998.

ADDRESSES: Send submissions to: CC:DOM:CORP:R (REG-119227-97), room 
5226, Internal Revenue Service, POB 7604, Ben Franklin Station, 
Washington, DC 20044. Submissions may be hand delivered between the 
hours of 8:00 a.m. and 5 p.m. to: CC:DOM:CORP:R (REG-119227-97), 
Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue NW., 
Washington, DC. Alternatively, taxpayers may submit comments 
electronically via the Internet by selecting the ``Tax Regs'' option on 
the IRS Home Page, or by submitting comments directly to the IRS 
Internet site at <a href="http://www.irs.ustreas.gov/prod/tax__regs/
comments.html">http://www.irs.ustreas.gov/prod/tax__regs/
comments.html</a>. The public hearing will be held in the IRS Auditorium, 
Seventh Floor, 7400 Corridor, Internal Revenue Building, 1111 
Constitution Avenue, NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Frank 
Boland (202) 622-3130; concerning submissions and the hearing, LaNita 
VanDyke (202) 622-7180 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

    The collection of information contained in this notice of proposed 
rulemaking has been submitted to the Office of Management and Budget 
for review in accordance with the Paperwork Reduction Act of 1995 (44 
U.S.C. 3507(d)). Comments on the collection of information should be 
sent to the Office of Management and Budget, Attn: Desk Officer for the 
Department of the Treasury, Office of Information and Regulatory 
Affairs, Washington, DC 20503, with copies to the Internal Revenue 
Service, Attn: IRS Reports Clearance Officer, OP:FS:FP, Washington, DC 
20224. Comments on the collection of information should be received by 
August 31, 1998. Comments are specifically requested concerning:
    Whether the proposed collection of information is necessary for the 
proper performance of the functions of the Internal Revenue Service, 
including whether the information will have practical utility;
    The accuracy of the estimated burden associated with the proposed 
collection of information (see below);
    How the quality, utility, and clarity of the information to be 
collected may be enhanced;
    How the burden of complying with the proposed collection of 
information may be minimized, including through the application of 
automated collection techniques or other forms of information 
technology; and
    Estimates of capital or start-up costs of operation, maintenance, 
and purchase of services to provide information.
    The collection of information in this notice of proposed rulemaking 
is in Secs. 48.4052-1, 48.4082-7(a), 48.4082-8(e), 48.4091-3(c), 
48.4101-2(a)(4), 48.4101-3(d), and 48.6427-11. This information is 
required to support exempt transactions and to inform consumers of the 
type of fuel that is being purchased. The likely respondents are 
businesses and other for-profit organizations.
    Estimated total annual reporting burden: 3,340 hours.
    The estimated annual burden per respondent varies from .20 hours to 
1 hour, depending on individual circumstances, with an estimated 
average of .29 hour.
    Estimated number of respondents: 11,600.
    Estimated annual frequency of responses: On occasion.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless the collection of 
information displays a valid control number assigned by the Office of 
Management and Budget.
    Books or records relating to a collection of information must be 
retained as long as their contents may become material in the 
administration of any internal revenue law. Generally, tax returns and 
tax return information are confidential, as required by 26 U.S.C. 6103.

Background

    Temporary regulations published in the Rules and Regulations 
section of this issue of the Federal Register provide rules relating to 
the kerosene tax, certain aviation fuel tax refunds allowed by section 
4091(d), and registration requirements for certain heavy vehicle 
manufacturers and retailers. The text of those regulations also serves 
as the text of these proposed regulations relating to kerosene. The 
preamble to the temporary regulations explains the temporary 
regulations.

Special Analyses

    It has been determined that this notice of proposed rulemaking is 
not a significant regulatory action as defined in EO 12866. Therefore, 
a regulatory assessment is not required. It also has been determined 
that section 553(b) of the Administrative Procedure Act (5 U.S.C. 
chapter 5) does not apply to these

[[Page 35894]]

regulations. It is hereby certified that the collection of information 
in these regulations will not have a significant economic impact on a 
substantial number of small entities. This certification is based upon 
the fact that the time required to prepare and submit the exemption 
certificates described in these regulations (many of which are similar 
to certificates that are already in use) is minimal and will not have a 
significant impact on those small entities that choose to provide the 
certificates. Therefore, a Regulatory Flexibility Analysis under the 
Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. 
Pursuant to section 7805(f) of the Internal Revenue Code, this notice 
of proposed rulemaking will be submitted to the Chief Counsel for 
Advocacy of the Small Business Administration for comment on its impact 
on small business.

Comments and Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any comments that are submitted (in the 
manner described in the ADDRESSES caption) timely to the IRS. All 
comments will be available for public inspection and copying.
    A public hearing has been scheduled for Wednesday, November 4, 
1998, at 10 a.m. in the IRS Auditorium, Internal Revenue Building, 1111 
Constitution Avenue, NW., Washington DC. Because of access 
restrictions, visitors will not be admitted beyond the Internal Revenue 
Building lobby more than 15 minutes before the hearing starts.
    The rules of 26 CFR 601.601(a)(3) apply to the hearing.
    Persons that wish to present oral comments at the hearing must 
submit comments by September 29, 1998 and submit an outline of the 
topics to be discussed and the time to be devoted to each topic by 
September 29, 1998.
    A period of 10 minutes will be allotted to each person for making 
comments.
    An agenda showing the scheduling of the speakers will be prepared 
after the deadline for receiving outlines has passed. Copies of the 
agenda will be available free of charge at the hearing.

Drafting Information

    The principal author of these regulations is Frank Boland, Office 
of the Assistant Chief Counsel (Passthroughs and Special Industries), 
IRS. However, other personnel from the IRS and the Treasury Department 
participated in their development.

List of Subjects in 26 CFR Part 48

    Excise taxes, Reporting and recordkeeping requirements.

Proposed Amendments to the Regulations

    Accordingly, 26 CFR part 48 is proposed to be amended as follows:

PART 48--MANUFACTURERS AND RETAILERS EXCISE TAXES

    Paragraph 1. The authority citation for part 48 is amended by 
adding entries in numerical order to read in part as follows:

    Authority: 26 U.S.C. 7805 * * *
    Section 48.4052-1 also issued under 26 U.S.C. 4052 * * *
    Sections 48.4082-6, 48.4082-7, and 48.4082-8 also issued under 
26 U.S.C. 4082 * * *
    Section 48.4101-3 also issued under 26 U.S.C. 4101(a) * * *
    Sections 48.6427-10 and 48.6427-11 also issued under 26 U.S.C. 
6427(n) * * *

    Par. 2. In subpart H, Sec. 48.4052-1 is added to read as follows:


Sec. 48.4052-1  Special rule.

    After June 30, 1998, the sale of an article is a taxable sale 
unless the seller has in good faith accepted from the purchaser a 
statement that the purchaser executed in good faith and that is in 
substantially the same form as the certificate described in 
Sec. 145.4052-1(a)(6) of this chapter, except that the statement must 
be signed under penalties of perjury and need not include a 
registration number.
    Par. 3. Section 48.4081-1 is amended as follows:
    1. Paragraph (b) is amended by adding the definition of kerosene.
    2. Paragraph (d) is revised.
    The addition and revision read as follows:


Sec. 48.4081-1  Taxable fuel; definitions.

* * * * *
    (b) * * *
    Kerosene means--
    (1) The two grades of kerosene (No. 1-K and No. 2-K) described in 
ASTM Specification D 3699; and
    (2) Kerosene-type jet fuel described in ASTM Specification D 1655 
and military specifications MIL-T-5624R and MIL-T-83133D (Grades JP-5 
and JP-8). For availability of ASTM and military specification 
material, see Sec. 48.4081-1(c)(2)(i).
* * * * *
    (d) Effective date.
    (1) Except as provided in paragraph (d)(2) of this section, this 
section is applicable January 1, 1994.
    (2) In paragraph (b) of this section--
    (i) The definition of aviation gasoline and the third sentence in 
the definition of terminal are applicable January 2, 1998; and
    (ii) The definition of kerosene is applicable July 1, 1998.
    Par. 4. Sections 48.4082-6, 48.4082-7, 48.4082-8, 48.4082-9 and 
48.4082-10 are added to read as follows:


Sec. 48.4082-6  Kerosene; treatment as diesel fuel in certain cases.

[The text of this proposed section is the same as the text of 
Sec. 48.4082-6T published elsewhere in this issue of the Federal 
Register.]


Sec. 48.4082-7  Kerosene; notice required with respect to dyed 
kerosene.

[The text of this proposed section is the same as the text of 
Sec. 48.4082-7T published elsewhere in this issue of the Federal 
Register.]


Sec. 48.4082-8  Kerosene; exemption for aviation-grade kerosene.

[The text of this proposed section is the same as the text of 
Sec. 48.4082-8T published elsewhere in this issue of the Federal 
Register.]


Sec. 48.4082-9  Kerosene; exemption from non-fuel feedstock purposes.

[The text of this proposed section is the same as the text of 
Sec. 48.4082-9T published elsewhere in this issue of the Federal 
Register.]


Sec. 48.4082-10  Kerosene; additional exemption from floor stocks tax.

[The text of this proposed section is the same as the text of 
Sec. 48.4082-10T published elsewhere in this issue of the Federal 
Register.]
    Par. 5. Section 48.4091-3 is added to read as follows:


Sec. 48.4091-3  Aviation fuel; conditions to allowance of refunds of 
aviation fuel tax under section 4091(d).

[The text of this proposed section is the same as the text of 
Sec. 48.4091-3T published elsewhere in this issue of the Federal 
Register.]
    Par. 6. Section 48.4101-2 is amended by adding paragraph (a)(4) to 
read as follows:


Sec. 48.4101-2  Information reporting.

    (a) * * *
    (4) Registered aviation fuel producers.

[The text of this proposed paragraph is the same as the text of 
Sec. 48.4101-2T(a)(4) published elsewhere in this issue of the Federal 
Register].


Sec. 48.6427-10  Claims with respect to kerosene.

[The text of this proposed section is the same as the text of 
Sec. 48.6427-10T published elsewhere in this issue of the Federal 
Register.]

[[Page 35895]]

Sec. 48.6427-11  Special rules for claims by registered ultimate 
vendors of kerosene (blocked pump).

[The text of this proposed section is the same as the text of 
Sec. 48.6427-11T published elsewhere in this issue of the Federal 
Register.]
Michael P. Dolan,
Deputy Commissioner of Internal Revenue.
[FR Doc. 98-17389 Filed 6-26-98; 2:02 pm]
BILLING CODE 4830-01-U